The currency that will change the world hit a new all-time high of over $19,850 this week.
Youve probably heard whats going on with bitcoin. In fact, we wrote about it last month.
The famous cryptocurrency is continuing to ride a slew of good news. Its up over 160% this year as I write.
Now, we told you that we wouldnt be talking much about bitcoin in American Investor Today. And we stand by the idea that it doesnt count as a currency until you can easily buy a cup of coffee or pay your rent with it.
But bitcoins rise has us excited for another reason: the technology behind it.
Thats because blockchain technology does a heck of a lot more than just power bitcoin. And it may one day become as important as the internet
I wont sugarcoat it: Blockchain is probably going to change the world. But like a lot of new technologies, its also hard to understand.
And here at American Investor Today, we make sure that our readers are getting big Wall Street ideas made Main Street simple.
So today, we want to give you the quick and dirty version
When you take away all the tech jargon, blockchain is just a digital database thats housed in multiple places.
It uses networks of computers usually hundreds or thousands. Each computer has to agree to confirm new data. No single person or group has control.
The data entered is permanently recorded and cant be tampered with. Any changes are logged as new data points. Anyone on the network can view and track every single update.
This unique way of verifying information is the heart of blockchain. Its the kind of technology that can let us store and exchange data in a secure and low-cost way.
Technically, you could have a blockchain on just a few computers. It wouldnt be as effective or secure, but the essence would still be the same. The computers would work together to verify information and keep the records. Thats how the blockchain technology works.
If that sounds simple, thats because it is.
But most of the time, when you see someone talking about blockchain, theyre talking about bitcoin.
So, lets talk about it.
The blockchain behind bitcoin runs on more than 40,000 computers throughout the world. They all have to agree to verify new transactions and data points.
It would be next to impossible to hack all 40,000-plus computers to attempt to post fraudulent information. Thats why bitcoin is considered unhackable.
And all other cryptocurrencies (things like bitcoin) are hosted on similar blockchains.
But this technology can transform all sorts of processes by making them safer and cheaper. So, they can host many things other than just cryptos
There are blockchains being put to use to securely track food as it moves across the country. This is helping grocery stores ensure that their produce and meats arent contaminated. Or if a batch has been contaminated, they can see precisely which one and how widespread the problem is.
Immediately, you may be able to see where this could be useful.
When I bought a new car a few years ago, the financing agent showed me how they were forced fill out paper forms with every new car sale and mail the forms to the company headquarters.
There, the forms were scanned into a computer and then shredded. All because the company didnt believe that emailing a document was secure.
Imagine how much time and expense could be saved if the company could rely on something to store and send that information.
Were not exaggerating when we say that blockchain could change the entire business world. But were also being honest with you when we say that were not interested in investing in blockchain today.
You might be wondering why were not going all in on blockchain. If it really could be the next revolution, what are we waiting for?
Let me remind you what things were like back in the 1990s, in the early days of the internet
We all knew it would be revolutionary. And hey, we were right who among us doesnt use the internet daily in 2020? I mean, the newsletter youre reading right now is delivered exclusively over the internet.
But the people who said that they could pinpoint the exact companies that would profit from the internet boom were wrong. They talked about things like Pets.com and Webvan and how these businesses would change the world.
But they didnt. Between January 2000 and June 2001, more than 500 internet companies crashed and went out of business including Pets.com and Webvan. And those are just the ones that had significant funding from investors.
At least $1.7 trillion disappeared from the market in the dot-com bust. Lots of investors thought they were picking the revolutionaries, but they were just picking duds.
The same story is playing out in the blockchain space today. Many companies are coming out with million-dollar promises and $10 results. There are few applications outside of cryptocurrencies. And as weve said, we dont believe cryptocurrencies are worth much right now.
So, we dont want to pick the duds of blockchain. We want to pick the companies thatll make it out alive. We want to invest in companies like Amazon and eBay internet companies that have grown massively since 2000.
Now, theres a light at the end of the tunnel. More and more companies are embracing blockchain technology. And we may finally see the shape of this revolution more clearly very soon. In fact, behind the scenes here, were hoping to bring you a lot more information about blockchain very soon.
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